Month: December 2021

Tax Planning for Retirement Plans: Understanding the Main Types of Retirement Accounts

Understanding the benefits and drawbacks of different retirement plans is crucial to long-term tax planning. Most retirement plan investment earnings are taxed at ordinary income tax rates—you receive an ordinary tax deduction for every contribution, and you pay ordinary income tax rates when you withdraw funds. However, certain types of retirement plans come with special …

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Tax Planning for Retirement Plans: Weighing the Tax Consequences for Early Withdrawals

When the need for emergency funds arises, many taxpayers may be tempted to turn to their retirement accounts. However, if the account holder has not reached full retirement age (FRA), withdrawing those funds early can result in a slew of tax penalties and other deductions. Before pulling retirement funds, taxpayers need to know the rules …

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